Why the option?
The structure of Manning's contract shows a clear intent by Condon and Manning: they wanted the Colts to commit to Manning – or allow him his freedom – beyond 2011.
Manning and Condon have forced the Colts to essentially choose between two contracts for Manning: (1) a one-year, $26.4 million deal for 2011, or (2) a five-year, $90 million deal with $70 million in the first three years.
Manning and Condon were determined to not allow the Colts a structure that allowed them an exit after Manning reached a certain age of expected decline, a fate experienced by accomplished NFL players every year.
What happens if the Colts exercise the option?
If the Colts inform Manning during that window of time that they will pick up the option, they will continue to have him as their quarterback – assuming he is healthy – and will move forward with him as their leader.
That decision will cost the Colts the following:
Option bonus: $28 million
Salaries (in millions):
Thus, in 2012 alone, if the option is exercised, Manning will make $35.4 million. As to those suggesting the Colts could exercise the option, putting them on the hook for $28 million, and then trade Manning, I would highly doubt that scenario. Irsay may be a bit eccentric, but he is not going to spend $28 million to then have another team receive that value. He does not want to trade Peyton Manning, and will certainly not do so after paying him $28 million!
Thus, if the option is exercised, on top of the $26.4 million Manning made in 2011, Manning's earnings for the two-year period of 2011-12 will be almost $62 million. He will be a Colt for the life of his career and be paid more than any player in the NFL for such career.
Manning + Luck = $50 million for 2012
If the Colts exercise the option and also select Luck with the top pick in the Draft, they will be committing over $50 million for the quarterback position in 2012. While Luck’s overall compensation will "only" be approximately $23 million over four years, he will receive a signing bonus and salary of more than $15 million in the first year of his deal. That is an untenable amount of money for that position, especially when the Colts paid over $32 million at quarterback in 2011.
Where things get interesting with the Peyton Manning decision, however, is if the Colts do not exercise the option. I'll address that, and the confusing issue of whether the option date can be moved or not, in Part 2 later this week. Stay tuned.
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